BlogCosts, updated
What a plant costs you before anyone buys it
Most nurseries can tell you what a plant cost to produce. Far fewer can tell you what it costs to keep, and for a crop that stands on the ground for one, two or five years before it sells, the keeping is often the larger part.
This post is arithmetic rather than research. The figures below are worked examples with made-up numbers, not industry data. The method is the point, and your own numbers are the ones that matter.
What it costs to hold a plant
Holding a plant costs you in four ways. The first is space. If your yard is full, every plant you hold is one you did not grow, which costs you even though no money changes hands. Water, feed and treatment are spent roughly in proportion to how long the plant stands. Handling covers spacing, moving, pruning, re-potting and winter protection, and a plant held for an extra season usually gets handled several more times. Finally, what you paid for the liner and inputs is sitting in a pot instead of in the bank, and at any interest rate above zero that is a cost. Together these give a carrying cost per plant per season.
A worked example with invented numbers
Take a #3 shrub that costs you $4.00 to produce and sells for $11.00, which looks like $7.00 of margin. Now say your carrying cost is $1.20 per plant per season. Sold in its first season, the plant makes you $5.80. Held one extra season, it makes $4.60. Held for two, it makes $3.40, so nearly half the margin has gone on a plant that still sold at full price.
Then suppose 10% of the block never sells. Those plants carry their full production and carrying cost and return nothing, so the plants that do sell have to cover them. At 10% shrink on a two-year hold, the real margin on the plants that sold comes out somewhere near $2.50 instead of $7.00. Running the sums with your own figures takes about an hour, and nearly everyone who does finds at least one crop they have been growing enthusiastically at a loss.
What the carrying cost changes
Once you know the figure, ageing stock stops looking neutral. Holding a block for a better price next year only pays if the plants gain value faster than they cost to keep, which container stock past its grade usually does not, so it is often better to sell the slow block in August at a discount. Shrink becomes a pricing input, because the 90% that sells has to carry the 10% that does not. Quick crops look better too. Two crops at $4 of margin, each turned in a year, beat one at $7 held for three years, though instinct disagrees because $7 is on the invoice. The useful question about any block is whether it is the best thing that square foot could be doing. On a family yard that question is about a few benches, and across a large operation with several sites it is about whole houses, but the arithmetic is the same.
The records you need
You need four accurate pieces of information: how many plants you have by variety and size, how long each block has been standing, what came out of each block last year, and roughly what a season of keeping costs per square foot. Most nurseries have the first approximately and the second in somebody's memory, the third nowhere and the fourth never. That, more than any difficulty in the sums, is why this arithmetic so rarely gets done.
Sprout will not work out your carrying cost, but it keeps the first three where you can find them. Every product carries its cost, counts are taken in the row by voice, and each lot's history records when it was planted and every dump since, with the date and the note left by whoever dumped it. That makes last year's shrink something you can read off rather than remember. If you start with only one record, make it the age of each block, because that shows where the money is leaking.